NYC Officials Take Notice of Astronomical Subway Construction Costs

Stephen Smith
, ContributorI blog about the politics and economics of urbanismOpinions expressed by Forbes Contributors are their own.

New York City’s subway lines – the engines that keep the city’s real estate market moving – are notoriously expensive to build. Tunneling projects in New York routinely clock in at five to ten times the cost of their Asian and European counterparts, putting the city’s measly 20-30% aboveground union construction premiums to shame. New York has finally restarted work on the century-in-the-making Second Avenue Subway, but MTA capital construction president Michael Horodniceanu says that anything beyond the initial Upper East Side segment “will be for our children or grandchildren.” And Bloomberg’s 7 train to Secaucus, or those fabled Utica and Nostrand extensions? Keep dreaming.

Until recently the cost difference was only discussed in the nether reaches of the transit blogosphere, but Manhattan Borrough President Scott Stringer is finally speaking up. Both the Times and Capital reported on his recent transit conference, where in addition to the usual calls for more funding, Stringer discussed New York’s exorbitant subway construction costs. He cited union work rules and regulatory overload as the two main cost drivers, and pointed out that Subway projects have come in at three or four times as expensive as London’s Jubilee Line, which costed $700 million per mile.

So what accounts for Stringer’s sudden outburst of concern? He’s an (oft-forgotten) contender for mayor, but perhaps more importantly, the MTA’s contract with NYC Transit mega-union TWU Local 100 is up on January 15. MTA CFO Robert Foran already told Crain’s that their focus in negotiations will be winning work rule concessions rather than wage cuts, which is in line with Stringer’s statements. It will be incoming MTA Chairman Joe Lhota’s first big battle, and we’ll soon find out if he can bring prices down low enough that New York can afford to finish the Second Avenue Subway within our lifetimes.